The government should promote innovation, not punish it
District Attorney of Sacramento County, Ho argues that ambiguous rules and enforcement practices, such as those for crypto, lead to confusion, rather than seeking clarity in the law to further growth.
As the District Attorney of Sacramento, I have spent more than 25 years holding people accountable. I prosecuted gang members, charged hate crime offenders and went after drug traffickers. I have also prosecuted fraud, financial crimes, corruption and high-tech crimes at the highest levels. As someone who has authored and helped pass legislation, I am mindful that both prosecutors and the public need clarity about the laws that govern them. I know what real crime looks like, and I know the difference between a genuine criminal and an industry caught in the crosshairs of a law that was never meant for them.
That distinction matters now more than ever, as federal prosecutors have been weaponizing a statute against software developers who have never touched a customer’s funds, never operated a business in the traditional sense, and never harbored criminal intent. As someone who has devoted his career to justice, I am here to say that is not justice, that is overreach.
Congress enacted 18 U.S.C. Section 1960 to target money-transmitting businesses, such as storefronts, wire services, and exchange houses that handle other people’s money and skirt the licensing requirements designed to prevent money laundering. It was designed as the enforcement mechanism for licensing requirements under the Bank Secrecy Act, aimed squarely at traditional money services businesses. It was a sensible tool for a sensible purpose. What it was never meant to do is criminalize the writing of software.
Yet that is precisely what has happened. Federal prosecutors have stretched Section 1960 to reach developers of noncustodial, peer-to-peer blockchain technology. These are people who built open-source tools that automate transactions between willing parties, but who never held a single dollar of user funds, never had “customers” in any real sense of the word, and never had any ability to intercept or redirect assets. Neither the developers nor the software itself controls other people’s funds or transfers funds on their behalf. Charging them under a statute built for traditional financial intermediaries is a mistake, because it is misinformed and misdirected. As prosecutors, justice requires that we charge people with what they actually did, under laws designed to cover it.
